Ghanaian taxpayers may soon be called upon to cough up over ?168 billion following the inability of Capital Telecom to pay back a loan of 14 million pounds guaranteed by the government of Ghana.
Informed sources say that Capital Telecom has so far only managed to pay 1000 pounds out of the loan.
Capital Telecom Ltd. (“CT”) – a private limited liability company was incorporated on 6th September 1994 and commenced business on 1st June 1995, with funds provided by a government guaranteed loan of 14 million pounds under a ECGD Credit facility from the Midland Bank (now HSPC).
According to “The Insight”, a private newspaper, “an amount of 14,368,666.34 pounds was disbursed by 13th December 1996 under the Southern Sector Rural Telecommunications Project.
The shareholders of the company are Messrs Danny Ofori-Atta, Fredi Asiedu and the late Thomas Henson. The objective of the company was to provide wireless telecommunication service to rural communities in southern Ghana with switches in the following districts: Akatsi Hub, Akim Oda Hub, Mpraeso Hub Tarkwa Hub, Awaso Hub, Amedzofe Hub and Akosombo/Osuyongwa Hub. Each switch was to cover an average of 40.60 km.
Three of the switches were fully installed and were put in operation at Akatsi in February 1997, following later by Akim-Oda and Mpraeso. The Akim-Oda and Mpraeso switches broke down in March 1999 and June 2000 respectively, leaving the Akatsi switch, which has been unstable for the past two years eroding customer confidence and resulting in decline in CT’s subscription.
Now Akatsi has about 276 subscribers after five years of operation due to the poor performance of the switch.
The breakdown of the two switches and the poor performance of the Akatsi switch during the last two years has resulted in loss of revenue and a fall in the income generating activities of the company. This has resulted in an inability to meet financial obligations including staff salaries, SSE, PAYE, TUC, utilities and those due to many other creditors such as local banks.
Within this period, various interested investors have not succeeded in striking a deal with the owners of the company to rescue or expand its operations. Besides this, there has been no visible effort on the part of shareholders to expand operations in the company and prevent it from collapsing.
The main concern here is that the company has paid only 1,000 pounds out of the 14 million pounds in 1998. The government and the taxpayers’ money now stands a risk of losing out on the whole investment if the company fails. Its staff also stand the risk of losing their jobs as well as over ?440 million (as at February ending) owed in salaries and other entitlements.
From 1999 to date, no monies have been paid to the following institutions: SSNIT on (behalf of staff), tax obligations to the Internal Revenue Service (IRS), and the Value Added Tax (VAT) secretariat, making the company vulnerable to seizure or being closed down by any or all of the above-mentioned institutions.
Various debts owed to a local bank and other creditors also pose the risk of the company being dragged into eternal legal battles and claims that threaten the progress and the very existence of the company.
Over the last two years no serious or positive effort has been made by the owners of the company to resolve these problems, and promises made to members of staff and creditors have never been kept.
The situation has become desperate. Various members of staff have resigned out of frustration, abandoning their earned salaries (amounting to several millions of cedis). Unless changes are made now, the future of the company looks bleak.
Ghanaian taxpayers may soon be called upon to cough up over ?168 billion following the inability of Capital Telecom to pay back a loan of 14 million pounds guaranteed by the government of Ghana.
Informed sources say that Capital Telecom has so far only managed to pay 1000 pounds out of the loan.
Capital Telecom Ltd. (“CT”) – a private limited liability company was incorporated on 6th September 1994 and commenced business on 1st June 1995, with funds provided by a government guaranteed loan of 14 million pounds under a ECGD Credit facility from the Midland Bank (now HSPC).
According to “The Insight”, a private newspaper, “an amount of 14,368,666.34 pounds was disbursed by 13th December 1996 under the Southern Sector Rural Telecommunications Project.
The shareholders of the company are Messrs Danny Ofori-Atta, Fredi Asiedu and the late Thomas Henson. The objective of the company was to provide wireless telecommunication service to rural communities in southern Ghana with switches in the following districts: Akatsi Hub, Akim Oda Hub, Mpraeso Hub Tarkwa Hub, Awaso Hub, Amedzofe Hub and Akosombo/Osuyongwa Hub. Each switch was to cover an average of 40.60 km.
Three of the switches were fully installed and were put in operation at Akatsi in February 1997, following later by Akim-Oda and Mpraeso. The Akim-Oda and Mpraeso switches broke down in March 1999 and June 2000 respectively, leaving the Akatsi switch, which has been unstable for the past two years eroding customer confidence and resulting in decline in CT’s subscription.
Now Akatsi has about 276 subscribers after five years of operation due to the poor performance of the switch.
The breakdown of the two switches and the poor performance of the Akatsi switch during the last two years has resulted in loss of revenue and a fall in the income generating activities of the company. This has resulted in an inability to meet financial obligations including staff salaries, SSE, PAYE, TUC, utilities and those due to many other creditors such as local banks.
Within this period, various interested investors have not succeeded in striking a deal with the owners of the company to rescue or expand its operations. Besides this, there has been no visible effort on the part of shareholders to expand operations in the company and prevent it from collapsing.
The main concern here is that the company has paid only 1,000 pounds out of the 14 million pounds in 1998. The government and the taxpayers’ money now stands a risk of losing out on the whole investment if the company fails. Its staff also stand the risk of losing their jobs as well as over ?440 million (as at February ending) owed in salaries and other entitlements.
From 1999 to date, no monies have been paid to the following institutions: SSNIT on (behalf of staff), tax obligations to the Internal Revenue Service (IRS), and the Value Added Tax (VAT) secretariat, making the company vulnerable to seizure or being closed down by any or all of the above-mentioned institutions.
Various debts owed to a local bank and other creditors also pose the risk of the company being dragged into eternal legal battles and claims that threaten the progress and the very existence of the company.
Over the last two years no serious or positive effort has been made by the owners of the company to resolve these problems, and promises made to members of staff and creditors have never been kept.
The situation has become desperate. Various members of staff have resigned out of frustration, abandoning their earned salaries (amounting to several millions of cedis). Unless changes are made now, the future of the company looks bleak.
